The six-week consultation focuses on 21 proposed amendments to the SORP which are considered necessary as a result of the changes made in December 2017 to FRS 102 Financial Reporting Standard.

 These changes out for consultation include:

• introduction of an accounting policy choice for entities that rent investment property to another group entity;
• clarification of the accounting treatment for payments by subsidiaries to their charitable parents that qualify for Gift Aid;
• clarification of the requirement for comparatives for disclosures required by the SORP; and
• introduction of a requirement for a net debt reconciliation to be prepared as a note to the statement of cash flows

The consultation is inviting comment on the following questions, set out in the draft update bulletin:

The first issue is whether stakeholders agree with how the amendments to FRS 102 have been reflected in the proposed amendments to the Charities SORP (FRS 102), and if not, which are subject to objections and why.

The second question is whether any other amendments to the SORP are necessary based on the recent amendments to FRS 102, and if so, details of what these are.

The consultation is not seeking views on the amendments to the underlying accounting standard as this is led by the Financial Reporting Council (FRC) and the amendments have been finalised.

Nigel Davies, head of accountancy services at the Charity Commission and joint chair of the SORP committee said: ‘One of the principal roles of the SORP is to provide charity specific guidance on applying UK-Irish accounting standards when preparing a charity’s accounts, and so it is important that any changes made to an accounting standard are reflected accurately and clearly in the SORP.’

Laura Anderson, Scottish charity regulator and joint chair of the SORP committee, said: ‘This is an important opportunity to help ensure that the Charities SORP continues to provide helpful guidance on charity accounting and reporting, and we encourage those that prepare charity accounts to share their views on how the changes to the reporting standard are being applied to the SORP for charities.

‘We would also like to hear views from users of charity accounts on the changes made and the impact on how useful charity reports and accounts are.’

The consultation closes on 4 April 2018. The changes will come into effect for accounting periods beginning on or after 1 January 2019.

Details of draft SORP update bulletin, and how to respond to consultation issued 20 February 2018.

Charities SORP Update Bulletin 2 consultation details

Report by Pat Sweet